RESEND: EGBs have seen a fairly.........>

EGB SUMMARY: RESEND: EGBs have seen a fairly uneventful morning session. A

modest risk on tone to markets has seen German yields a little higher on the day

and peripheral spreads generally a little tighter with bonds and equities moving

in opposite directions.

- Yesterday's ECB meeting saw downside risks to growth acknowledged but saw

little market reaction, and today's trading has seemed a little directionless.

- The German IFO saw the expectations component fall to the lowest level since

November 2012 and disappointed consensus expectations, but bad news was already

priced into the market following yesterday's manufacturing PMI falling below 50

and the weak ZEW survey last week.

- Schatz started the day weakly, but yields are now almost unchanged on

yesterday's lows. The curve has bear steepened a little with 10y Bund yields up

0.4bp on the day to 0.184%.

- Italian spreads to Bunds have bucked the trend a little this morning and are

around 0.6bp wider on the day, on little news.